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Exhibit 4.2
NATIONAL-OILWELL, INC.
AMENDMENT 1997-1 TO THE
DRECO ENERGY SERVICES LTD.
AMENDED AND RESTATED
1989 EMPLOYEE INCENTIVE STOCK OPTION PLAN
WHEREAS, pursuant to the Combination Agreement dated as of May 14,
1997, as amended, (the "Combination Agreement") by and between
National-Oilwell, Inc. (the "Company") and Dreco Energy Services Ltd.
("Dreco"), and the Plan of Arrangement under Section 186 of the Business
Corporations Act (Alberta) (the "Plan of Arrangement"), as approved by the
Court of Queen's Bench of Alberta, the Company will acquire shares of the
capital stock of Dreco;
WHEREAS, Dreco maintains the Dreco Energy Services Ltd. Amended and
Restated 1989 Employee Incentive Stock Option Plan (the "Dreco Stock Option
Plan") for the benefit of its eligible employees;
WHEREAS, pursuant to the Combination Agreement and the Plan of
Arrangement, effective as of the Effective Time on the Effective Date (as those
terms are defined in the Plan of Arrangement), each of the then outstanding
stock options granted under the Dreco Stock Option Plan will be converted into
an option to purchase shares of common stock of the Company in accordance with
Section 2.1(j) of the Plan of Arrangement (collectively, the "Converted Dreco
Stock Options");
WHEREAS, pursuant to the Combination Agreement and the Plan of
Arrangement, effective as of the Effective Time on the Effective Date, the
Company has agreed to assume the obligations of Dreco under the Converted Dreco
Stock Options, and to substitute itself for Dreco as the sponsor of the Dreco
Stock Option Plan;
WHEREAS, the Company desires to amend the Dreco Stock Option Plan to
reflect the Company's assumption of Dreco's obligations under the Converted
Dreco Stock Options, and the substitution of the Company as the sponsor of the
Dreco Stock Option Plan.
NOW, THEREFORE, the Dreco Stock Option Plan is hereby amended as
follows:
1. Section 2(b) of the Dreco Stock Option Plan is amended by
adding the following sentence to the end thereof:
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"From and after the Effective Time on the Effective Date (as
those terms are defined in the Combination Agreement dated as of May
14, 1997, as amended, (the 'Combination Agreement') by and between
National-Oilwell, Inc. and Dreco Energy Services Ltd., and the Plan of
Arrangement under Section 186 of the Business Corporations Act
(Alberta) (the 'Plan of Arrangement'), as approved by the Court of
Queen's Bench of Alberta), the term 'Common Share' shall refer to a
share of common stock, par value $.01, of National-Oilwell, Inc.;"
2. Section 2(d) of the Dreco Stock Option Plan is amended by
adding the following sentence to the end thereof:
"From and after the Effective Time on the Effective Date (as
those terms are defined in the Plan of Arrangement and Combination
Agreement), the term 'Corporation' shall refer to National-Oilwell,
Inc.;"
3. Section 2(g) of the Dreco Stock Option Plan is amended by
adding the following sentence to the end thereof:
"From and after the Effective Time on the Effective Date (as
those terms are defined in the Plan of Arrangement and Combination
Agreement), all references herein to The Toronto Stock Exchange shall
refer instead to the The New York Stock Exchange."
4. Section 4 of the Dreco Stock Option Plan is amended by
deleting the first sentence thereof, in its entirety, and substituting the
following therefor:
"The total number of Common Shares which, at any one time,
may be subject to issuance or which may be issued pursuant to the Plan
(or pursuant to other options issued, or employee stock purchase plans
maintained, by Dreco Energy Services Ltd. prior to the Effective Time
on the Effective Date, as those terms are defined in the Plan of
Arrangement and Combination Agreement), shall not exceed 975,000
Common Shares (893,002 Common Shares from and after the Effective Time
on the Effective Date), subject only to adjustment in accordance with
the provisions of section 18."
5. Section 5(a) of the Dreco Stock Option Plan is amended, in its
entirety, to read as follows:
"the maximum number of Common Shares which may be subject to
issuance or which may be issued to any one Employee pursuant to the
Plan (or pursuant to other options issued, or employee stock purchase
plans maintained by Dreco Energy Services Ltd. prior to the Effective
Time on the Effective Date as those terms are defined in the Plan of
Arrangement and Combination Agreement) shall not exceed five percent
(5%) of the Common Shares outstanding from time to time; and"
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6. Section 13.1(f) of the Dreco Stock Option Plan is amended by
adding the following parenthetical phrase at the end thereof:
"(from and after the Effective Time on the Effective Date, as
those terms are defined in the Plan of Arrangement and Combination
Agreement, all references herein to The Toronto Stock Exchange shall
refer instead to The New York Stock Exchange)."
7. A new Section 18.6 is added to the Dreco Stock Option Plan to
read, in its entirety, as follows:
"18.6 Notwithstanding anything herein to the contrary, at
the Effective Time on the Effective Date (as those terms are defined
in the Plan of Arrangement and Combination Agreement), in accordance
with Section 2.1(j) of the Plan of Arrangement, each then outstanding
Option shall be converted into an Option to purchase shares of common
stock, par value $.01, of National-Oilwell, Inc. as follows: (a) the
number of Option Shares subject to each such Option immediately prior
to the Effective Time on the Effective Date shall be multiplied by an
exchange ratio of .9159, and (b) the Purchase Price of each such
Option immediately prior to the Effective Time on the Effective Date
shall be divided by the exchange ratio of .9159."
8. Section 1 of Part A of the Plan shall be amended by adding the
following sentence at the end thereof:
"From and after the Effective Time on the Effective Date (as
those terms are defined in the Plan of Arrangement and Combination
Agreement), the reference to The Toronto Stock Exchange shall refer
instead to The New York Stock Exchange."
9. This Amendment 1997-1 shall be effective as of the Effective
Time on the Effective Date as those terms are defined in the Plan of
Arrangement and Combination Agreement.
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